How Does Green Finance Development Enhance the Stability of Commercial Banks in Uzbekistan?

Abstract

Climate change is becoming an increasingly material source of risk for the global financial system, and banks are turning to green finance to manage this risk. This article analyses how the development of green finance enhances the stability of commercial banks in Uzbekistan. Four banks differing in ownership structure — Hamkorbank, the National Bank of Uzbekistan (NBU), Ipak Yuli Bank and Aloqabank — together with system-wide indicators, are taken as the object of study. The research relies on a qualitative-comparative analysis combined with benchmarking against international empirical evidence; the data are drawn from the official statistics of the Central Bank, banks' audited statements, the project databases of donor institutions (EBRD GEFF) and peer-reviewed international literature. The analysis shows that green lending in Uzbekistan currently flows mainly through a donor-capital — commercial-bank — borrower chain, while the stability indicators of the banking system display a positive dynamic. Empirical evidence from ASEAN countries confirms the positive contribution of green finance to bank stability, and this relationship is stronger in bank-based and climate-vulnerable systems — which applies directly to the case of Uzbekistan. The results indicate that expanding green lending is a promising avenue for strengthening the stability of Uzbek banks.